>> live from pier 3 in san francisco, welcome to the late edition of "bloomberg west," where we cover the global technology and media companies that are reshaping our world. i'm jon erlichman in for emily chang. our focus is on innovation, technology, and the future of business. let's get straight to "the rundown." the news goes from bad to worse retail giant the says in cryptic pin numbers were also stolen during that massive data breach. apple is on top when it comes to

online shopping with nearly one quarter of all online purchases made on christmas day coming from iphones or ipads. duck dynasty" patriarch phil robertson will be back on television as a any has decided to resume shooting the hit reality series with the entire cast. we begin with breaking news -- apple is putting investor carl icahn's proposal up to vote and urges shareholders to vote against it. apple wants to commit to buying back at least $50 billion worth of stock. in a proxy filing, apple says the company believes the management team and board are in the best position to determine what is the best long-term interest of the company's business. apple says it is reviewing its buyback and dividend plan and will announce any changes by the spring. for more on this breaking news, we are joined on the phone by an analyst at wedge partners who

covers apple very closely. he joins us from salt lake city, utah. what can you tell us about this? apple has been pretty quiet up until this point on this issue. is that not true? >> yes, they have been quiet. vocal on this, making clear via twitter and television what he would like to see apple do, but this is the first time we have heard apple make commentary on how they would like to see the board vote on the issue. >> this information is coming out, as it usually does, ahead of an annual meeting. apple has to tell us when that meeting aches place early next year what is going to be on the agenda -- when that meeting takes place early next year what is going to be on the agenda. apple is going to put it in front of shareholders. technically, shareholders could vote in favor of something like this, but it is apple that is saying, "we would suggest that you do not vote in favor of this." is that basically the way to think of this?

>> that is correct. this comes out in an sec proxy statement with apple basically saying that they recommend the board not vote to increase the size of the buyback as icahn would like to see. apple already has one of the largest buybacks in history in place. they already have quarterly dividends. there is a $100 billion row gram in place. the company feeling is that that is sufficient right now. -- there is a $100 billion program in place. they do not see a need for an increase, but they are spending cash and other meaningful ways, including buying a lot of companies. we have seen a number of technology acquisitions this year from apple, many of which have been under their radar, that have been enhancing their products quite fast, and other things that we think we will see apple do down the line. >> we should highlight that in its comments, apple says there are a lot of different ways it uses this money -- to your point, building the business --

in addition to the fact that they already have this significant return of capital plan in place. you wonder how this will set up among various shareholders. we recently highlighted the view of one of the most influential pension funds in the country and a major shareholder in apple, which basically said it did not side with carl icahn. as you well know, we saw an interesting showdown at a freebie is apple shareholder meeting when another activist investor -- david einhorn -- was pushing for them to think a little bit differently about how they return their money. can you comment on that? >> these guys have been vocal about what they would like to see apple do. the good news is that five years ago, steve jobs was doing nothing of the sort. there was no buyback. there was no -- there were no meaningful dividends. we have seen charitable giving from the first time -- charitable giving for the first time from the company.

tim cook is moving in the direction of what shareholders would like to see, but they are not going to be bullied by some of these activist investors. icahn is amazing. he is a legend, but if you wanted something like this done, he should have done it quietly. i think he would have had a better chance of success if he really wanted apple to increase their buyback. apple is not going to relent. they certainly do not look look -- do not want to look like they are going to relent. another big story we are watching -- national security agency scoring a key win in court after a series of setbacks over surveillance program. today, a federal judge in new ruled that the nsa possible collection of telephone data was not only legal but could also prevent future terrorist

attacks. the judge writes that the blunt tool only works because it collects everything. the aclu is appealing the ruling. this comes 11 days after another federal judge said the collection probably violates the constitution. our chief washington correspondent has been following this one closely. what can you tell us in terms of how this is being received in washington right now? >> it is not a total surprise. different judge, different outcome here, but we have had several judges weigh in on these surveillance issues, and they had taken different views. the consensus in washington means this will -- the consensus in washington is that this will ultimately be headed towards the supreme court. in this case, we have a clinton appointee who is again backing the government's case. in this case, also taking away, as you suggested, the notion

that had this been in place previously, perhaps the 9/11 attacks could have been foiled. it was simply the government responding in kind to what happened and installing this program. the judge did not find it unconstitutional. in the end, this is a win for the justice department. a spokesman saying they are pleased with the decision. peter king, the congressman from new york, saying it is a victory and adding that it preserves a vital weapon or the united states in our war against international terrorism. bottom line, a big win here for the government and the nsa, but just one in a much larger legal fight to come. >> for those who have not followed it as closely as the washington insiders, what can you tell us about the obama

administration, what it has been telling us about how it has been reviewing everything right now? >> you have three different tracks -- the legal track playing out as we see in this courtroom in new york and ultimately likely headed to the supreme court. then, the ad -- the administration itself. president obama said he would conduct his own review of these surveillance programs. he had a panel of experts give him advice last week and said in his press conference he will come out with his own proposed changes in january. watch for that perhaps is the next big step. congress is also considering changes. lawmakers, including many from the president's party, are prepared to make much more substantial changes to these programs. the question is -- does that put the president in a unique sort of box in which he might be met to threatenght have to veto changes? quickly, for the

companies that are caught in the middle of this, what happens now? >> they are still caught in this legal limbo situation where they have to respond to government .equests for information the question there is -- what about the proposal from the president's advisers about having the companies keep the information themselves and have the government asked them for information on a case-by-case basis? we have not heard much from the companies, but verizon, at&t -- they are in legal limbo, at the mercy of the government to some extent and at the mercy of the courts as well. >> thanks, as always. "dynasty" patriarch phil robertson was put on indefinite leave from the hit show after making anti-gay comments -- sty"t dynasty -- "duck dyna patriarch phil robertson. ♪

>> welcome back to "bloomberg west."

i'm jon erlichman. target's holiday hacking nightmare is not over yet. the retailer says it could did in numbers -- encrypted pin numbers were also stolen, but target says it is confident those are safe and secure because the information needed to decrypt them was not saved on target's system. with us to discuss it is the former head of security at mozilla firefox and current .hase head of security michael, let's start with you. i think the average person sees this new headline and says, "i don't get it." what exactly is target telling us? >> unfortunately, we are seeing a huge rise in cyber crime attacks on retailers. target has been breached. they have credit card data that has been stolen. they have pu debit card dated tt

was stolen. the latest information is that 's were stolen. in theory, the encryption should work if everything is done correctly, but there's a lot of devil in the details. these breaches happen for a reason -- there was a weakness. that same type of thinking or weaknesses could be present in the way they did their encryption as well. >> pin's compromised but encrypted -- what do you think of that? >> i would totally agree. just to say that it is encrypted is not enough. is the algorithm unique for this system? we have had other cases where passwords, e-mails have been encrypted, and it used a common be veryon, and it would easy for someone to do an attack against that.

just to say it is encrypted -- again, like michael said, the devil is in the details. is it a unique encryption? >> a lot of times, these cases pop up, and you can only point to that one for the news of the day, and it is hard to connect all the dots, but there have been similar attacks or data .reaches like this one barnes & noble, i believe, had something similar. >> just last year, barnes & noble had an attack where hard data was stolen from the store. attackers went into 63 different stores and modified the pin device itself to physically steal the information that was entered. ?> what ultimately happened for people wondering what will happen with this target story, what happened with barnes & noble? >> in these situations, there is a risk to customers. banks can take care of credit

card fraud. the end-user, the customer, is not at times of risk, but for debit card fraud, we have a different story because that money is being withdrawn from that account, and that can be tough for them to file complaints and get the money back. banks are taking proactive action. targetfew days after released this information, chase lower the amount that could be used or cash withdrawal and thets -- chase lowered amount. that's a pretty bold statement at the height of christmas season. >> david, let me get you back in this conversation. how is target in a position to make a comment like this, feel confident in saying this user toa is safe and secure when, the rest of us observing this, it really does not seem that clear that that is the case? >> again, a lot of us looking on the outside do not have all the information.

maybe the actual intrusion was found, and it may have been on the servers, and they have not found it at the pos system itself. there's a lot of information we do not see. one thing i would bring up -- we talk about barnes & noble, we are talking about target -- 98% of all attacks are not even discovered. we have to understand that it is .ot just these that got caught this is the world we are living in until we move to smart chip technology. we are trying to put a band-aid on a hemorrhaging wound. >> coming back to michael, failing this push to smart card technology, you've got the you've got amazon, which is holding huge amounts of data on behalf of people right now, you've got the rise of new payment systems, and you put all

these together, and there are a lot of unknowns. >> it's a very complex system, and at the end of the day, there is valuable data in these systems -- user data, credit card data, money. we have cyber criminal organizations that are intelligent. they are advanced. they are targeting all these things. when you think about what they distributingey are these attacks against all these systems to cause damage ultimately to pull out money because it is a full underground business. right now, you can purchase the compromised target credentials for around $30 on the black market. >> before we go, if you were somebody shopping at target during the holidays, what do you do? >> watch your credit cards. make sure that you do not see any strange purchases. tonge your pin numbers just be safe. i do not think they can really trace it all the way back to

just after thanksgiving. i think we will see if it comes up if more data has been taken. i would change all of your pin numbers and just understand this is the way we are going to be living for the next couple of years. froml right, dave perimeter security, joining us along with michael. thanks to both of you. we will be right back. ♪

" patriarch phil robertson will not be missing any episodes of the hit series. just a week after suspending robertson, a and he has reversed its decision. "ou may recall, "duck dynasty has pulled in as many as 12 million viewers, making it the most-watched cable reality series. this is quite a turn of events over the last couple of days. what is our takeaway? >> an indefinite suspension took about a week to find a solution. both sides needed a solution here. this is one of the most-watched shows on cable television.

it is the biggest revenue televisionor a&e networks, which is co-owned by disney and hearst. this show, as you mention, is averaging this season almost 15 million viewers per episode. both sides wanted to find a solution. the family came out last week and apologize for the course phil robertson used -- apologized for the coarse language that phil robertson used but said they could not envision going forward without him. a&e said they could have some public service announcements that will run nationally on all that willworks encourage tolerance and understanding. we are not sure yet if that will feature any of the robertson family members. it was not in the press release, so far tos declined

elaborate on the statement it put out today. but what we do know is that phil robertson will return to the show, and production will resume this spring. showw important is this for a&e broadcast network? >> this is "the big bang. theory"is "the big bang for a&e. it dominates their prime time. not only does the show bring in about $80 million in advertising, it gives pay-tv systems the confidence to pay a&e more and more money in subscriber fees to carry the channel. on top of that, the real money comes in merchandise sales. "forbes does quote magazine estimates that this year, "duck

dynasty" merchandise will total or hundred million dollars in " magazineforbes estimates. it has become an incredibly .mportant show in all quadrants >> we only have about 10 seconds left. but what is the social media lesson from this for any content creator these days? >> if you are a personality like have abertson, you strong presence on social media, you will have a lot stronger say . this is not a world where the television network can dictate all the terms. they are going to have to work with the talent, especially talent with a strong social following. >> got to leave it there. thank you for joining us from los angeles with the latest on "duck dynasty."

day, apple's ios beat out android when it came to mobile shopping with nearly a quarter of all online purchases made on an iphone or ipad. more details next on "bloomberg west." ♪

>> you are watching "bloomberg where we focus on technology and the future of business. twitter shares took a big hit today, ending a big run-up of late, after mcquarrie capital saying it may be overvalued. twitter shares had nearly tripled from the ipo price, despite the company having never turned a profit. apple is once again asking a federal judge-- to ban u.s. sales of certain samsung phones that are no longer on the market. apple seeking a ban of more than 20 samsung phones and tablets

that were found to infringe on apple patents last year. tim cook received total compensation of just over 4.2 million dollars last fiscal year, slight increase from 2012, including a base salary of $1.4 million. according to a filing, he did not receive any more stock awards. those awards are worth more than 560 million bucks. this holiday season, it looks like apple may be the winner in the mobile shopping wars ibm'sing to a report from benchmark. apple ios devices were used to make 23% of purchases on christmas day. ibm also found that ios customers spend about $94 per order, almost twice the amount of the average android shopper.

analytics benchmark is part of our next guest's portfolio. how do you put this together? how do you figure out what is going on? who is spending what on what phone? >> we have a benchmark data set that comes from more than 800 retail sites, so we have a pretty comprehensive sample. a prettyrop is outstanding holiday season for online shopping. in particular, christmas day, we 16.5%.ine sales up about mobile has really reached a tipping point this year. dayctually had on christmas 48% of online traffic coming from mobile devices, so almost half, which includes both smart phones and tablets -- smartphones and tablets.

we seen a pattern where folks are using their smart phones to browse and tablets to buy. we saw smartphone browsing numbers to be about 28.5% of all online traffic. about 18% from tablets. that really flips around when it comes to purchasing. about 19% of all purchases were tablet devices and only 9% of purchases were made through smartphones. smartphone to browse, tablet to buy. as you mentioned, strong performance for ios versus android. >> why do you think that is the case? >> a lot of people got their android phones along with their contract and carrier, whereas the iphone -- you know, they made an investment in an additional amount for that device, so the demographics skew to people who are slightly more

affluent and also who are a little more comfortable with browsing and purchasing online. the techno-graphics their lend themselves to people doing a little bit more online shopping -- the techno-graphics there lend themselves. >> there is a link on google which says if you bought an iphone during the holidays or got an iphone during the holidays, you click on it, it shows you all the different google tools you can load up on your iphone. do you think there is a way to sort of tie that together with what we are learning with how much spending has taken place on android devices versus ios devices? >> we have seen people take an approach where they have obviously got their own operating system, but then they understand the reality that there are other phones out there that they need to be able to interoperate with and provide tools for, so they have the available for now

the iphone, and i think they will work in a multi-platform world that we all live in. >> we only have about 30 seconds left, but it feels like a lot of people want to be able to use all sorts of mobile devices for shopping anywhere, everywhere. apple still has a very closed world. a very profitable one that has served them well up to this point, but as we see more mobile commerce, could that be a hindrance for them in terms of keeping people happy if it is more of a closed off world? >> what we are seeing really is strong consumer demand for mobile devices. that includes smartphones and tablets. marketers are going to follow the money and go where the consumers are. i think we will see strong investment across different device types and different vendor sets. >> appreciate the insight. henderson, strategy director with ibm commerce.

speaking of gadgets, did you get any gadget gifts this holiday? maybe you are waiting until 2014 to upgrade to new tech toys. we are going to preview the top tech gadgets for 2014 up next on "bloomberg west." ♪

>> i'm jon erlichman. this is "bloomberg west." turning now to our special year 5,"eries, the "bwest top inking about the top five gadgets we will see in 2014. our next guests' number five pick was interactive learning tools. here's why --

>> first of all, i think they are ready. the amount of gdp spent on learning is huge and our country . i think parents are going to start using their dollars towards tools that help their kids learn math and science and other things. if you look at what just happened with the coding in the last month with all those hours time, i think it will be a huge push by parents to give their kids something of value. >> this is stuff you know very well from your day job. i would love to get your to your number five pick. >> we are seeing a lot of really interesting initiatives in schools. huge.rg has been new york is making a huge push to teaching kids to do coding.

we are seeing them reframe the way they do education based around these devices. >> we are going to move on to number five, which is google glass, which was kind of a 2013 kind of thing, but we might see bigger adoption in 2014. >> this is really the only beginning of this device. everyone we have seen out in the world with one of these things on our developers, reviewers, people like that, but to actually get these things on peoples faces, to get developers excited, to see what kind of third-party apps we could create on this -- i think this will continue to be huge. wearables will continue to be huge, and google glass is leading the way in terms of getting that in front of people's faces. >> and, are you a google glass dan, are you a google

glass guy? >> i am not. i think it will be more for professional markets first. people who spend all their life in front of a screen, even people who use the bloomberg terminal, will ultimately be able to use it. as a consumer product, there will be a small group of people that think it is cool, but as a new yorker, i think it faces quite the challenge. >> let's get to dan's number four pick. story a has been a huge 2013, and you think that continues in 2014? >> i think there's a lot of arerground apps that people using. my theme is really less a gadget and more what people will use on the gadgets. i have seen some really cool sort of snapchat wannabes who might go past it because they will do video, pictures, and

text, so i think there will be a lot of usage of confidential conversations, particularly ones that do not get stored, as we learned from your nsa conversation. >> you could make the argument that one of the big tech stories this year was snappedchat saying thanks but no thanks to facebook -- snapchat saying thanks to the thanks but facebook -- to facebook. >> that was huge. put in the same place, i probably would have taken the money and run, but it is stay in charge of your company and manage with the company is doing, but in the future, we will see a lot of sites like instagram, facebook, twitter really utilize that ephemeral capability. >> brian, in your number four list, you have a

game here. tell us about it. >> this really feels like the virtual reality peripheral we have been waiting for. i did not believe in it until i had a chance to play around with it. we have seen various builds of it over the past year. it is really incredible. the technology is finally coming home, and they are really doing it and a fantastic way. you can see all around you as you are moving around. this is the immersive gaming experience that everybody has been waiting for. >> dan, i know you know a lot about gaming, but i want to get your number three, which is back on the educational subject -- tablets. tablets in high schools for 2014. were goingwish they to college is faster, but the reality is higher education institutions like colleges -- a

professor gets to determine what they teach and how they teach it, but i think high schools are more rapidly jumping on the bandwagon, the fact that we need to get these kids skills to get jobs. outcomes are a much bigger deal. interactive learning, the ability to teach, individualize, the ability for a teacher to teach multiple languages without knowing multiple languages -- i think you will see more and more of the classroom. i think you will see two kinds -- subsidize, and the second is on average, people spend $700 a year on new technology in many different kinds of neighborhoods. there's no doubt that high schools will push it faster than colleges. >> a lot of great ideas. brian, i want to go back to you in new york with your number three gadget. hp makes its way into the conversation. the leap motion devices. >> to be fair, leap motion made

its way into the conversation. this is one of the companies partnering with this device. they have come out with a product now, but we are talking laptops. in one's, this is a completely different way of interacting with your computer. this is about as close as you will get to touch. it is fully gesture-based. you can swipe around, control with your hands. i do not think we will see the end of the mouse any time in the near future, but it's nice to think that maybe at the very least, we are kind of heading in that direction. >> don't go away. we will have the top two picks for the top gadgets of next year right after this quick rate. you can also watch us streaming on your tablet phone -- tablets, phone, and now on appletv. ♪

>> this is "bloomberg west." i'm jon erlichman. i want to get back to our special, year-end series where we count down the top right gadgets of next year -- the top five gadgets of next year. silicon valley, the tesla has to be on your list, because that is what everyone seems to be driving out here, but the brilliance of the engineering, their ability to fix the cars, improve the cars -- somebody has hasred out a way -- or elon figured out a way to take design and experience and blend it together. there is nobody else doing what he is doing. it is probably only piece of hardware that i have. the rest are all uses of hardware. >> is a more family-friendly

model going to open up the market on who tesla targets? >> he has done it very interestingly. the first was for a small segment just to prove they could do it, and the second was a sedan. his vision to make it more family-friendly and less than $30,000 is something that at scale i think he can achieve. i think that is going to lead to something to make this something we will have an everybody's garage. >> brian, number two on your list, we will see if that happens, but you are saying the apple smart watch. >> it's going to be a huge segment. we're going to see a lot of companies making a big push. we already have samsung, sony. microsoft was in the game at one point. pebble is pretty popular with one segment of the ovulation,

but i do not think anybody has done it quite right. i do not think anyone has given us a super compelling reason to wear one of these. ofone company is capable doing that, it is definitely apple. sticking with the rift, dan, your number one gadget pick for 2014, job own -- jawbone. >> what they are doing in terms of combining elegance and quality, but they are allowing you to get more out of the things you already own, already have. their speakers, their sound ultimately go into projecting video. some people have netflix or other kind of content, and they are getting more value out of it. particularly for things like the health had a gory, which is they are focused on getting more things out of your body -- particularly for things like the health category. the big trend will be focusing

on getting more out of what you have. >> before we go, brian, your number one pick in what has been a very hot category in 2013 but likely will continue -- the 3-d printer area. tell us what your thoughts are. >> i think i actually picked for this one because they are the best-known name, but there are a ton of companies .ut there prices are going to continue to come down. these will become more and more user-friendly. we are seeing a lot of scanners, so it will be much easier for people to get the objects to print out. 2014 might be the year these really kind of hit mainstream, but certainly over the next couple of years, a lot more people will own 3-d printers. counting down to the top five gadgets to expect next year.

it is the oxford's dictionary word of the year -- we are talking about the selfie. everyone from president obama to darth vader has been snapping them. we have more on the rise of the selfie. >> i don't have a problem with the selfie. it is a natural human instinct to capture yourself in the way that you would like to be remembered. this is how artists use to survive. the walls of the met are hung with selfies. it's possible that having a camera in your pocket all the time has perverted a natural human instinct and turned it into unbearable human issa system, but if we are going to indict ourselves for that, we have to remember the role of the selfie. twitter makes you post one when you sign-up. if you do not have one on facebook, it will remind you. instagram is the house that selfies built.

these are not clubs. they are companies, and they need you to selfie to make money. my facebook profile picture is me walking away from the camera with a child on my shoulders. these are just selfie ways to imply that i'm too cool for offies, but nobody gets out here alive. you cannot be part of twitter or facebook or instagram without making some kind of decision of what you would like the world to think you want to be known as. is that even grammatical? if these companies cannot keep me and everyone else selfie-ing all the time every day, they have no reason to exist. when i'm done with this video, i'm definitely going to put it on facebook and see what my friends, and. i don't think the rise of the selfie has anything to do with decline in humility. it is just a business strategy,

and it is working. >> from selfies to the "bwest by te," where we focus on one number that tells us a whole lot. rick thomas take it away -- rick, taken away. yte today is 100, which represents the number of years aston martin has been in existence. >> you are a serial entrepreneur who knows everything that happens in social media. how did you become an investor in this? and you are not alone in the tech community. >> several people in silicon valley got involved. a guy down at yahoo! brought us all together. a sickly technologist -- logists whotechno love the technology that goes into a car. >> one thing you have to be careful of is selfies while you're driving on the track.

watch for his social media picks of 2014 next week. ♪

>> welcome to "lunch money." we tie together the best stories and business news. here is what we have today. in energy, we're going to be looking at the economics of crude. our movie -- -- how to win an oscar. in motors, connecting flights. textron makes a deal. company chiefs are doing it differently from no marketing to know managers. the best of 2013, what better way to finish the show than with cars and tanks. we willki